Should you ever lock in a variable rate mortgage?

Summary

James Loewen continues the mortgage discussion on 'Smarter, Not Harder', focusing on whether to convert from a variable to a fixed-rate mortgage. Understand the implications of this decision, and why sticking to your variable rate might be smarter. Start working smarter with your money today.

Transcript

James Loewen:

Hey guys, thanks for joining me. I'm pretty excited about this one. Today we're going to continue the conversation on variable mortgages and should I lock-in, i.e., with all the changes and fluctuations in the variable mortgage front? Should I be moving my mortgage from a variable term into a fixed rate term? Should you ever be doing that? That's an age old question we're going to dive deep on. I'm James Loewen. Let's get going. We're going to work on helping you guys work smarter, not work harder.

All right guys, so you're in the middle of a variable term. And generally at any time, you can convert from a variable to a fixed, most often nut no cost. What does that mean? Should you be focusing on now watching the market going up and down? The answer I feel is, no. Don't waste your time. Generally, there's going to be a split between your variable and what the lock-in rate or the fix rate can be. The way that the variable strategy works is if you stay the course and ride the variable up and down. If you lock-in, you're now going to be elevating increasing your mortgage rate. All the savings you enjoyed on the first part, you're going to lose now that you've locked in.

So best strategy? When should I lock-in? Don't ever lock-in. Stay that course and ride the average timeframe. It generally works out best, in your case. I'm James Loewen. Now you know and we've got you working smarter instead of working harder.

Thanks so much for joining and of course, if you have questions on your own specific mortgage, because each one of us has unique needs, feel free to reach out. Myself and team are here and nothing but happy to help. I'm excited and join us next time where we're going to be talking about relationships and the best way to integrate and strategies to succeed in your own financial wellbeing as a partnership.

As always, I'm James Loewen. Getting it going and helping you work smarter, not harder.